Deficit-cutting Plans Raise Concerns

(NECN: Alison King) - When it comes to the nation's deficit, many Americans have a hard time wrapping their mind around 1.3 trillion dollars -- that is: The amount that's being paid out this year that exceeds what's coming in.

On November 2nd, voters made it clear at the polls -- they want Washington to start reining in that spiraling debt. The question is, are American's willing to accept the recommendations to make that happen.

These just released proposals come from President Obama's bi-partisan commission on reducing the deficit lead by former Republican Senate leader Alan Simpson and President Clinton Chief of Staff - Democrat Erskine Bowles.

Erskine Bowles/deficit reduction commission: "If we don't bring these deficits down and eventually get to balance, you know we are headed for disaster."  

They have put forward an ambitious package of spending cuts and tax increases, which would result in four-trillion dollars worth of deficit reduction through 2020. It includes cuts to Social Security, Medicare and the Pentagon budget.

Other recommendations include the elimination of the child tax credit, the mortgage interest deduction and the earned income tax credit

The commission has also proposed a 15-cent/per gallon increase in the federal gas tax.

Barry Bluestone: "This bi-partisan panel is going to get clobbered by the left, the right and maybe even the center. But I actually think they've done us some good here."

Barry Bluestone is an economist at Northeastern University who says if we keep doing things as usual -- we will soon get to the point where we are spending a trillion dollars a year -- simply to pay interest on the national debt.  

But early reviews are not promising.

From Nancy Pelosi:  "Simply unacceptable." referring to cuts in Social Security and Medicare.

Many Republicans are equally emphatic when it comes to one trillion dollars in tax increases.

Bluestone: "This is an interesting framework, it's the beginning of a conversation and a dialogue and I hope people will take it that way but right now, dead on arrival."

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